ULTRA: PLAYING WITH FIRE? TECHNOLOGY IN ASIA

As digital banking in Asia plays an ever increasing role in the client relationship, is the traditional service model of the ‘fireside chat’ under threat? Or is digital banking a buffer against the ever increasing service demand in the region?At the end of last month, Credit Suisse launched a new state-of-the-art digital platform for its clientele in Asia. With Singapore as the launch hub, the new platform, initially available only on the iPad, provides clients with 24/7 access to account information, market insights tailored to their portfolios and trading tools. The Swiss bank states the move was in response to CapGemini, RBC Wealth Management and Scorpio Partnership’s Global HNW Insights Survey 2014*. The survey stated that 82% of high-net-worth individuals in the Asia Pacific region expected their relationship with their wealth provider to be conducted either entirely or mostly through digital channels.More importantly 68% said that they were more likely to find a new provider if their current firm did not offer a combined digital and traditional client experience.Many firms are likely to follow in Credit Suisse’s footsteps, due to the client demand for a digitally integrated service model. According to a recent report by E&Y, APAC consumers do not value their relationship managers highly. Clients are more self-directed and enjoy the convenience, mobility and information services digital channels offer. They are also fee-conscious. Wealth providers can also significantly reduce costs and costs to serve by delivering their proposition via digital platforms.

This rise in digital banking however does not mean the end of the traditional service model. In fact, firms are currently struggling to keep up with the rapid rise of the region’s wealthy population. According to the Capgemini, RBC Wealth Management World Wealth Report 2014, Asia’s HNW populace stood at 4.32 million, with a growth rate of 17.3% (Figure 1). According to Scorpio Partnership’s research, there are only 4,000 relationship managers across Hong Kong and Singapore. The growth of HNWIs is vastly outstripping the supply of experienced advisory talent.

Figure 1.: HNWI Population, 2008-2013 (by region)

HNW Population 2008-2013

With so many prospective clients, relationship managers do not have the resources or capacity to offer tailored investment advice and focus on business development.

Instead, by introducing an effective digital platform, relationship mangers will be able to provide their clients with faster access to information, have more availability to provide clients with a traditional ‘face-to-face’ service where required, and acquire new clients.

Pathik Gupta, Head of the Wealth Management, McLagan for the Asia Pacific Region believes “A digital platform will enable banks to focus on improving the productivity of their RM which is low in Asia compared to global averages. It will certainly not reduce the rate of recruitment but will make banks and bankers more focused on growing business”.

Digital banking is therefore paramount to a firm’s success in the Asia Pacific region. With limited relationship mangers available for the firm and their clients, digital banking allows the firm to make the best use of their available resources and reach potential new clients whilst servicing existing relationships. Instead of eradicating the ‘fireside chat’, digital platforms can serve to encourage them.

*Taken from the Capgemini, RBC Wealth Management World Wealth Report 2014

News from the world of wealth:

Labour pledges to end non-dom tax loophole – (Financial Times)

Deutsche Asset & Wealth Management targets UHNW market – (Citywire)

Citigroup Targets 10% Jump in Asian Wealth-Management Assets – (Bloomberg)

Fidelity launches solution for mass affluent clientele – (Investment News)

Coming events in the world of wealth:

wealth management events
Rory PenningtonAuthor:  Rory Pennington, Analyst at Scorpio Partnership.

Expertise:  Works within the analysis team at Scorpio providing both research and analytical assistance on projects ranging from marketing mapping to client insight.

Background:  Rory has a bachelor of honours degree in History from the University of Nottingham and is a keen sports enthusiast. He is also an avid film-goer and particularly enjoys films featuring Chris Nolan or Daniel Day-Lewis.

 

 

 

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